Reuters: Bankruptcy News: Investors cling to Barclays paper ahead of UK supply decline

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Investors cling to Barclays paper ahead of UK supply decline Sep 19th 2012, 10:38 By Aimee Donnellan Wed Sep 19, 2012 6:38am EDT LONDON, Sept 19 (IFR) - Barclays Bank was unable to prise the majority of its targeted bonds from investors' hands in its latest liability management exercise as accounts brace themselves for a significant decline in UK FIG supply. "The take-up was lower than what has been achieved in the capital space. There are clearly questions around reinvestment opportunities particularly in the longer end of the curve," said a banker on the deal. Issuance in the UK FIG space is expected to decline in 2013 as the Bank of England's Funding For Lending Scheme gets underway, giving the country's banks the opportunity to access cheap funding. "Banks are doing more and more liability management exercises but in the context of QE3, central bank buying of bonds and the Bank of England's funding programmes it's not easy for investors to part with their bonds," the banker added. Barclays bought back just 30% of its targeted senior unsecured notes on Tuesday, as it joined the flurry of UK banks seeking to put their low-yielding cash to work. The UK borrower announced the results of its offer on the same day Lloyds launched another jumbo liability management exercise on GBP20.25bn equivalent of senior and covered bonds. The average take-up for Barclays across the four tranches was 30%, with the take-up rate on the US dollar parts at 20% and 37%, while the euro and sterling saw rates of 24% and 44%. Unlike Lloyds and RBS before it, Barclays targeted intermediate maturities on its senior notes, which ranged from seven to nine years. Lloyds and RBS targeted short-dated as well as longer maturities. Broken down further, the self-led exercise saw Barclays buy back EUR469m of its EUR1.95bn 4.875% 2019 issue, almost half GBP320m of its GBP724m 5.75% 2021 issue, USD402m of its USD2bn 6.75% 2019 note and USD1.05bn of the USD2.82bn 5.125% 2020s. Link this Share this Digg this Email Reprints

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